Japan-US Business Report LogoJapan-U.S. Business Report

No. 343, April 1998

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Japanese Companies in the US


A digital, interactive simulator ride system like no other is the lofty goal of a tie-up between HITACHI, LTD. and ENTERTAINMENT DESIGN WORKSHOP, LLC. The electronics giant, which created an amusement system planning department 18 months ago, brings to the project its strengths in computer graphics and virtual reality, while start-up EDW of Sheffield, Massachusetts will contribute its film-making expertise. The blueprint for the simulator ride system calls for a new generation of interactivity, enhanced player VR-image immersion, and improved system expandability and flexibility. The partners, which plan to have products ready for demonstration by November, also will coproduce middleware for quick, low-cost production of story-based interactive contents.

Essentially abandoned by its parent, BANDAI DIGITAL ENTERTAINMENT CORP. is trying to make a go of it on its own. Tamagotchi virtual pet developer BANDAI CO., LTD. decided to liquidate its Japan-based Bandai Digital subsidiary after sales of the Pippin Atmark, a home video game machine with Internet capabilities developed in conjunction with APPLE COMPUTER INC., failed to live up to expectations. The Cypress, California outfit will refocus its business to develop and market products leveraging the Internet and such emerging technologies as the Windows CE operating system while continuing to market a line of CD-ROMs. It plans to launch Surf Monkey, a children's Internet site, and to come up with a Windows CE version of DigiMon, a digital monster toy that is a follow-up to Tamagotchi.

Financial pressures at home have prompted ITOCHU CORP. to sell a block of its stock in TIME WARNER INC. to CITIBANK N.A. The trader acquired a stake of roughly 3 percent in the media conglomerate in September 1995 after exchanging shares it had bought in 1992 in Time Warner's entertainment subsidiary for convertible preferred stock in the parent. This stock has soared in value since then. Itochu reportedly sold about 30 percent of its shares, but executives say the company's ties with Time Warner will not be affected. TOSHIBA CORP., which also acquired approximately 3 percent of Time Warner's shares in the same way as Itochu did, is said to be mulling the sale of part of its holding as well.

Airlines on both sides of the Pacific are quickly taking advantage of the unrestricted code-sharing arrangements possible under the February U.S.- Japan aviation agreement. Soon after JAPAN AIRLINES CO., LTD. and AMR CORP.'s American Airlines announced a tie-up (see Japan-U.S. Business Report No. 342, March 1998, p. 10), ALL NIPPON AIRWAYS CO., LTD. and UAL CORP.'s United Airlines agreed to form an alliance. Starting in late October, Japan's biggest domestic airline and United will put each other's flight numbers on a total of 118 weekly flights on 11 routes across the Pacific and to selected destinations within the United States and Japan. Code-sharing will be extended in the future to all transpacific flights as well as to additional destinations in the two countries. In time, United will code-share on ANA flights beyond Japan to Asia, while ANA will code-share on United flights beyond the United States to Central and South America.

In a cost-cutting move, JAPAN AIRLINES CO., LTD. will outsource passenger and cargo ground services at the New York, Los Angeles, San Francisco and Honolulu airports. The switchover, which will start in June, will cause 200 of the 300 people JAL employs at these airports to lose their jobs. The airline expects this move to save it $19.4 million over the six years through March 2004.

An exchange rate of ¥129=$1.00 was used in this report.

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